On November 4, 2024, United Europe hosted a roundtable in Paris with Enrico Letta (President of the Jacques Delors Institute, former Dean of the School of International Affairs at Sciences Po Paris (PSIA), and former Italian Prime Minister) where he shared insights from his report, Much More Than a Market, on advancing the EU’s Single Market. The meeting, held in an exclusive setting with 20 attendees, featured a Q&A session where Enrico Letta explored the challenges and future opportunities for European economic integration and the importance of Franco-German cooperation.
Since Jacques Delors introduced the concept of the Single Market in 1985, the EU has evolved, now comprising 27 member states with increasingly complex legislation and potential benefits from economies of scale. Commissioned by the European Council, Letta’s report offers a strategic plan for deepening the Single Market in the coming European Commission term, calling for immediate action.
Key Takeaways:
Financing Strategic Goals: The EU’s ambitions – such as the green and digital transitions, defense capabilities, and potential enlargement – face a critical funding challenge. Letta argues for leveraging the Single Market by mobilizing both private and public capital, beginning with a Savings and Investments Union that expands on the existing Capital Markets Union initiative.
Incomplete Capital and Banking Union: One major gap in the Single Market is the absence of a unified capital and banking union. Initially designed to keep London as Europe’s financial hub, Brexit forced a shift, with Paris now hosting the European Banking Authority – a change some member states, like Luxembourg, oppose. Cross-border mergers, such as Unicredit’s attempted acquisition of Commerzbank, highlight the lack of cohesion in financial regulations and resistance to fully integrating the banking sector.
Promoting Private Sector Involvement: To advance the Single Market, Letta emphasizes the need for robust financial markets that encourage private sector investment in public projects, making the costly transition towards full integration achievable.
European Code of Business Law: Enrico Letta advocates for a European Code of Business Law as a transformative measure to unify the EU Single Market, creating a standardized “28th regime” for business operations across member states. This code would simplify the complex web of national regulations, enhancing the ease of cross-border business within the EU. By codifying business law at the European level, Letta believes the EU can better compete with larger markets like the U.S., making expansion within Europe more attractive, particularly for start-ups.
Infrastructure Challenges
Letta’s report also addresses the fragmented state of critical infrastructure sectors – such as transportation, energy, and telecommunications – which are still largely managed on a national level. For instance, Europe lacks a cohesive high-speed rail network connecting major cities, limiting integration and cross-border mobility. The energy and telecom sectors face similar issues, where national boundaries and legacy stakeholders hinder seamless operation. Letta suggests simple yet symbolic reforms, like adopting a unified European dialing code, to reinforce a more integrated European identity and functionality.
Defence spending
Enrico Letta stresses the importance of increasing defense spending across Europe to address rising security challenges, especially due to the conflict in Ukraine. He believes that a robust European defense policy would reduce reliance on the United States, enabling greater strategic autonomy for the continent. Letta calls for enhanced cooperation within the EU to build stronger collective security and defense capabilities.Currently, of the €140 billion Europe has allocated to support Ukraine, 80% has gone to jobs outside the EU (mainly in the U.S., Turkey, and South Korea), leaving only 20% benefiting Europe. Letta argues this ratio should be reversed to 80% in favor of Europe to boost local job creation and gain public support from EU taxpayers.Enrico Letta notes that defense is not part of the EU single market, with member states following mostly national strategies. This approach raises costs, adds complexity, and limits interoperability, ultimately weakening Europe’s overall defense capacity. Greater European investment in defense could also serve as an opportunity to renew cooperation with the UK, with both sides showing interest in developing a Common Defense Market.
The Time to Act is Now: The Letta report offers a compelling case for urgent action. He underscores that the time for decisive action is now; realizing a fully integrated Single Market requires political commitment and concrete steps by EU leaders. Ursula Von der Leyen has taken Letta’s report seriously and has included several proposals in the mission letters to her new Commissioners. European citizens also view reforms of the Single Market positively. Look at how much opposition there was to the Euro. Yet surveys show that 75% of Eurozone country citizens are now satisfied with the single currency. Also, the most challenging project was achieved, the introduction of the EURO, but Europe still has no integrated financial services.
Turning these proposals into reality will depend on political commitment from different key players. The greatest threat to the report’s impact is the drawer – left unread and unimplemented.
We sincerely thank Enrico Letta for his participation and engaged discussion, as well as our board members Paulius Kuncinas and Marcus Lippold for their support in making the roundtable possible and our President Günther H. Oettinger for his keynote speech.